Most loans can be discharged in the following situations: "Circumstances beyond the borrower's control" do not include things like having to drop out of college before graduation or inability to find a job after graduation.However, there is a possibility that they could include a school using illegal recruiting tactics – for example, guaranteeing the student a well-paid career. Department of Education promised debt relief to students of the bankrupt for-profit Corinthian Colleges schools (click here for more information on how to apply).If you aren’t working in a public service position, you may still be able to get some of your student debt forgiven – but it will take longer.Federal income-based repayment plans allow for some debt forgiveness after a minimum of 20 years (terms and conditions vary by program).In order to get some debt forgiven under the public service program, you must first make 120 qualifying payments (meaning, paying the minimum amount due on time).These payments must be made while you are working for a qualified employer – generally, a federal, state or local government organization or a nonprofit organization with tax-exempt status: In effect, you qualify after 10 years on the job and 10 years of payments.
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But this statistic is misleading, because a lot of borrowers think this means qualifying for some type of student loan forgiveness program. Actually, most borrowers qualify for student loan forgiveness through one of these “secret” ways.
The secret is simple: sign up for a qualifying student loan repayment plan, and your loan will be forgiven at the end of the plan. What's even better is that your income could be low enough to qualify for zero or minimal repayment, at which your loan will be forgiven at the end.
Non-federal loans (those handled by private lenders and loan companies) aren’t part of this program. Ford Direct Loan, and instead borrowed through the Federal Family Education Loan Program (FFEL) or Perkins Loan Program, you are allowed to consolidate these debts into a Direct Consolidation Loan; this new piece of consolidated debt would then be eligible for public service loan forgiveness, under the same terms as those described above.
Keep in mind that only payments made on the combined loan count toward the 120-payment minimum; earlier payments made on the old loans don't get considered.
Under certain circumstances, federally backed student loans – such as Direct Subsidized Loans and Federal Perkins Loans – can be discharged or forgiven.